My interview with Julia Gillard this morning on Sunrise was a bit like an episode of Yes Minister.

But please (Prime) Minister, I’m not an idiot.

You be the judge here;

http://au.tv.yahoo.com/sunrise/video/-/watch/23988992/flood-levy-debate/

I just wanted the Prime Minister to explain why we needed a Flood Levy instead of the Federal Government simply paying for it out of the taxes we already pay.

My view, and that of most economists, is that the Federal Government is more than capable of funding the reconstruction of flood affected areas out of its own resources without hitting us with a flood levy.

But let me make it very clear that I have no issue whatsoever in spending what it takes to get Queensland and regional Victoria back on their feet. Queensland is the cornerstone of our coal and tourism export sectors so it is imperative we get infrastructure back quickly.

I’m just querying why it has to come out of a new tax.

Our economy is in good shape. We have close to the lowest Government debt in the world, unemployment is low, inflation under control.

Plus there is a $2.4 billion slush fund (called the Contingency Reserve) just sitting there for this very reason. That Fund will rise to $5.9 billion by 2013/14.

The Contingency Reserve sits there as a buffer for the Federal Budget in case something unforeseen happens.

My argument is a devastating flood is unforeseen. The Prime Minister says I’m wrong. According to her, it’s in case more people go to the doctor than expected and health costs blow out, or there are more people unemployed than expected and social security costs rise.

That is just political bull dust. Unforeseen extra costs in rebuilding roads and bridges are the same thing.

The Coalition set this Contingency Reserve up for this very purpose. They dipped in to this fund, for example, when HIH collapsed and it covered all those customers whose claims weren’t paid.

The frustrating thing for me was I basically wanted a couple of assurances which I think are pretty common sense.

. why not use the Contingency Reserve... Gillard said she can’t.

. if this year’s Federal Budget results are better than expected will she cancel the Flood Levy and pay for it out of the unbudgeted money they received… avoided the question.

. if the cost of the Queensland reconstruction is not as much as expected will she refund the money… avoided the question.

. will she guarantee that every dollar will be spent on flood reconstruction and not pinched by the Government for something else… yes, guaranteed.

. will she look at cutting the foreign aide budget because we need it to help ourselves rather than others… avoided the question.

I think these are pretty sensible questions to ask. By not answering them brings suspicion.

Let me know what you think.

.